Hydro One

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Hydro One Inc.
Type Crown Corporation
Industry Electric Utilities
Predecessor(s) Ontario Hydro
Founded Toronto, Ontario (1999)
Headquarters Toronto, Ontario, Canada
Area served Ontario
Key people
Products Transmission and Distribution
Revenue Increase CA$ 5.7 Billion (2012)
Profit Increase CA$ 745 Million (2012)
Total assets Increase CA$ 20.8 Billion (2012)
Total equity Increase CA$ 6.5 Billion (2012)
Owner(s) Government of Ontario
Employees 5,811 regular employees (2012)
2,021 temporary, contract and part-time employees (2010)
7,066 pensioners (2010)
Parent Hydro One Inc.
Subsidiaries Hydro One Networks Inc.
Hydro One Remote Communities Inc.
Hydro One Brampton Networks Inc.
Hydro One Telecom Inc.
Website Hydro One

Hydro One Incorporated delivers electricity across the Canadian province of Ontario. It is a corporation established under the Business Corporations Act (Ontario) with a single shareholder, the Government of Ontario.[1]

Hydro One traces its history to the early 20th century to the establishment of the Hydro-Electric Power Commission of Ontario, renamed "Ontario Hydro" in 1974.

In October 1998, the provincial government passed the "Energy Competition Act" which restructured Ontario Hydro with the aim of privatizing all electrical generating and transmission/delivery.

Service territory[edit]

Hydro One is a holding company with four subsidiaries, the largest being Hydro One Networks. It operates 97% of the high voltage transmission grid throughout Ontario, and serves 1.3 million customers in rural areas across the province in its capacity as Ontario's largest distribution utility.

System information[edit]

Hydro One's Transmission Line voltages are 500,000 volts, 230,000 volts and 115,000 volts. Hydro One has interconnections with Manitoba Hydro, Hydro-Québec, Minnesota Power, DTE Energy/ITC, Niagara Mohawk Power and the New York Power Authority.

Generators[edit]

Hydro One works with the transmission and distribution network by connecting generating facilities operated by Ontario Power Generation and a number of privately owned companies, to it. The generators deliver the electricity they generate at hydroelectric, coal, natural gas, wind, solar and nuclear facilities to businesses and people across Ontario. The generators have different responsibilities than Hydro One.[2] The power from generators connected to Hydro One’s high voltage system is transformed to more than 50 kV (50,000 volts). The transmission-connected generators are registered with the Independent Electricity System Operator (IESO). Transmission lines, strung between metal towers or concrete poles, are not as plentiful as their distribution lines, which are most commonly strung between wooden poles.[2] The distribution system is connected to Hydro One’s generating facilities. It delivers the electricity generated at hydroelectric, wind and other facilities to businesses and people across Ontario. These distribution facilities work at voltages of 50 kV or less.[2]

Ontario's electricity grid is made up of a 29 000 km high-voltage transmission network that delivers electricity to large industrial customers and municipal utilities and 123 000 km low-voltage distribution system that serves about 1.3 million end use customers mainly in rural service areas and smaller municipal communities in the province. More than 75 percent of the applications to connect small generators are in Hydro One's rural service territory along the company's distribution system. While Hydro One has connected thousands of small projects to the grid it is approaching their technical limits of the wires and equipment in some rural locations. In these areas there are two issues that limit the number of projects that Hydro One can safely connect without putting the grid in jeopardy. The first issue is the physical limits of the power lines and the second is a phenomenon called 'islanding'. In larger areas that are densely populated, Hydro One's wires are thicker and designed to deliver larger amounts of electricity. In rural areas, Hydro One's distribution wires are smaller, thinner and deliver a smaller amount of electricity because they were designed to serve a much smaller number of customers than in large urban centers. These thinner lines deliver electricity safely and reliably to rural customers and are able to support the connection of small generation projects spread across the line, but these lines become over loaded when more electricity is fed back to the grid than the line was built to deliver. In some areas where the program is extremely popular, many generators want to connect to the same thin line but the line is not able to support the transfer of so much electricity.

The second issue is about islanding. Hydro One's distribution system knows how to protect itself under certain conditions. For instance, during a storm if a tree falls on a line, the system shuts itself down, similar to a circuit breaker. This protects the company's customers and employees from accidentally coming into contact with a live electrical line; it also protects appliances like televisions from uncontrolled surges and drops in voltage. In addition, when there is a fault, the line must be dead. Also when solar panels are attached to such lines, they must also be shut down when there is a fault on the line. If they are not shut down, electricity keeps flowing from the solar panels to all points between the panels. This can create an unsafe condition called islanding, which can put at risk customers, employees, and the equipment drawing power from that line. Hydro One prevents islanding by limiting the amount of generation that the company connects in one area; this ensures that the electrical load is greater than generation at all times. Ontario has moved to smart meters, which could support even more solutions to these problems. By using the company's existing network and working with customers, Hydro One is exploring new ways to deliver the cleaner electricity which Ontarians are helping to generate.[3]

History[edit]

Hydro One Headquarter in Markham
Main article: Ontario Hydro

Hydro One was originally part of the Hydro-Electric Power Commission of Ontario (HEPC or Ontario Hydro), which was established in 1906 by the provincial Power Commission Act to build transmission lines to supply municipal utilities with electricity generated by private companies already operating at Niagara Falls. The first chairman was Adam Beck, minister without portfolio in the provincial government of Sir James P. Whitney. Beck had been a prominent advocate of a publicly owned electricity grid.

The commission's initial responsibility was to build transmission lines, in order to supply municipal utilities with power. The power that was being transferred by HEPC was already being generated at Niagara Falls by previously established private companies. Also during 1906, the company assigned Adam Beck as chairman. A year later, Beck and his colleague William Peyton Hubboard fought for the public ownership of the company. Later in 1908, HEPC purchased power from Niagara Falls and sought to transmit this power over its own lines, which at the time, had not yet been established. The company continued its steady growth for the next few years. and by 1914 HEPC built its first owned power generating station located on the Severn River.

Years later in the early 1920s, HEPC expanded further and became an electricity distributor itself. And no longer did the company only transmit to municipal utilities, but to rural areas as well. Moreover, in 1922 the company's first unit of the Chippawa hydroelectric development on the Niagara River initiated service. And upon the units completion in 1925, it became the largest generating station in the world.

Prior to this HEPC bought out the generation and transmission assets of the Electrical Development Corporation, which was the last remaining private power company. Further in 1926 encountered a speed bump, for during this time HEPC entered into a long-term contract with Gatineu Power Company, located in Quebec. These contracts were needed in order to accommodate a growing demand for power and electricity. However, these same contracts were to become a source of controversy during the Great Depression when there was an overcapacity in the system. The development of the St. Lawrence and Ottawa rivers was stalled due to jurisdictional complications. The development of the rivers would have allowed access to a preferred source of power. It was only in 1939 that the Quebec contracts were reinstated and the development of the rivers were continued.

Further, in the late 1940s and early 1950s HEPC took a great leap forward with development of hydro-electric potential along the St. Lawerence River. During the mid-1950s HEPC joined all its power stations and transmission systems into one network in order to become more efficient and flexible. Also during the 1950s, hydro electric development was supplemented by the construction of thermal coal fired power stations in Toronto. And by the end of the 1950s HEPC began construction of Canada's first extra high voltage (500 000 volts) transmission lines. This brought power from northern Ontario to demand in southern Ontario. However, these transmission lines would only come into service in 1967. And by the start of the 1970s all of Ontario's power systems had merged, creating a province wide grid.[4]

500,000 (center) and 230,000 (far left and right) volt transmission lines in the GTA, which Hydro One is responsible for.

In 1974 the Power Corporation Act reorganized the system as a crown corporation called "Ontario Hydro", the name it was most usually known by.

In 1998, the Progressive Conservative Party of Ontario (PC) government of Mike Harris passed the Energy Competition Act which authorized the establishment of a market in electricity. In April 1999, Ontario Hydro was re-organized into five successor companies: Ontario Power Generation, the Ontario Hydro Services Company (later renamed Hydro One), the Independent Electricity Market Operator (later renamed the Independent Electricity System Operator), the Electrical Safety Authority, and Ontario Electricity Financial Corporation. The two commercial companies, Ontario Power Generation and Hydro One, were intended to eventually operate as private businesses rather than as crown corporations.

By 2001, Hydro One had acquired 88 municipal utilities. In December 2001 the provincial government announced the intention to sell Hydro One under an initial public offering, however by April 2002 various groups in opposition to the plan were able to successfully challenge the government in the Ontario Superior Court, forcing a halt to the IPO.[5]

In 2002 an electricity market began operating. However, critics questioned, among other things, whether the market was truly competitive or could ever become competitive, given that an electricity grid is not a private good. Public dismay at an increase in prices led the government of Harris's successor, Ernie Eves, to freeze electricity prices for residential and small business consumers. This freeze was maintained after the Liberal Party of Dalton McGuinty replaced the PC government in 2003. The freeze was removed and prices were raised in April 2004, and have been increased again subsequently.

Restructuring[edit]

Ontario Hydro was restructured on April 1, 1999 into five separate entities: Ontario Power Generation, the Ontario Hydro Services Company', the Independent Electricity System Operator (originally named the Independent Electricity Market Operator), the Electrical Safety Authority, and Ontario Electricity Financial Corporation.

On May 1, 2000 the Ontario Hydro Services Company was renamed "Hydro One Incorporated" and reorganized as a holding company with four subsidiaries:

  • Hydro One Networks Inc.
  • Hydro One Remote Communities Inc.
  • Hydro One Telecom Inc.
  • Hydro One Brampton.

Between 1998 to 2000, Hydro One acquired 88 municipal electrical utilities. Numerous local/municipal distribution companies were also consolidated during this time.

In May 2002 the provincial government launched an open electricity market, although generating and distribution remained under control of the government.

Effective December 8, 2006, President and CEO Tom Parkinson's resignation was accepted [2]. His resignation was prompted by a controversy surrounding use of company property and improper processing of personal expenses uncovered by the Ontario Auditor General.[3]

Hydro One also owns the distribution utility for the city of Brampton. This is another subsidiary known as Hydro One Brampton. This subsidiary operates separately from the main Hydro One corporation and operates only in the city of Brampton.

First Nations and Métis relations[edit]

Hydro One continues its efforts to develop and maintain respectful and positive relationships with First Nations and Métis communities across Ontario.[6] Hydro One, as did its antecedent companies, maintains relationships with First Nation and Métis communities in Ontario. The First Nations and Métis Relations team has staff committed to each region of Ontario. Hydro One continues to grow its relationship with the First Nations and Métis communities.[6] There are 24 First Nations communities in which Hydro One Network has facilities and it serves more than 100 First Nations communities. Hydro One Remote Communities Inc. controls and maintains the generation and distribution assets, which supply electricity to 21 communities throughout the northern part of the province that are not connected to the province’s electricity grid. 15 of these communities are First Nations.[6]

See also[edit]

Hydro One - A-Star with AirStair attachment

References[edit]

External links[edit]